10:04 pm
21 October 2016

Tanzania’s Magufuli Pushes For Quick Start to Uganda Oil Pipeline As Kenya Tries To Salvage Deal

TOTAL SA has funds to build a pipeline linking oil fields in landlocked Uganda with a port on Tanzania’s Indian Ocean coast, the Tanzanian government said, after its president met with an official from the French company.

Total’s Vice President for East Africa, Javier Rielo, “assured President John Magufuli that the company will begin construction of the crude-oil pipeline project from Uganda to the Tanga port as quickly as possible because there is money for the project,” the presidency said Monday in an e-mailed statement.

A Total spokesman declined to comment on today’s meeting. He referred to a December statement in which France’s oil major expressed its preference for a pipeline transporting crude through Tanzania, based on cost, reliability and safety assumptions for the infrastructure.

magufuli man

The 1,410-kilometer (876-mile) pipeline will cost as much as $4 billion and employ 1,500 people directly, according to the statement. Magufuli announced March 2 that Uganda had agreed to the deal for the facility, which will connect Uganda’s Lake Albertine oil fields to a port in Tanga, Tanzania.

Tanzania will also benefit from the pipeline should companies prospecting in the center of the country and in Lake Tanganyika strike oil, Minister of Energy and Minerals  Sospeter Muhongo said in the statement.

Kenya, which has been trying to sign an agreement for Uganda’s oil to flow through its territory, has dismissed assertions that the infrastructure would be routed through Tanzania. A link via Kenya could cost an estimated $4.5 billion.

Cards on table 

The country is in coming days expected to hold a meeting with Uganda to explore options, according to the principal secretary in its petroleum ministry, the Star newspaper reported.

Tullow, which has oil discoveries in Uganda and Kenya of around 2.3 billion barrels, would favour the route via Kenya. “It is clear that, due to obvious economies of scale, a joint pipeline connecting the two major oil resources in East Africa is the lowest cost-option for both Uganda and for Kenya,” Tullow spokesman George Cazenove said by e-mail.

One of the routes proposed by Kenya would be through its northern territory to the coastal town of Lamu. That’s an area close to Somalia, where Islamist militants have been waging an insurgency against the government for the past decade. The al-Qaeda-linked fighters have also carried out attacks in Kenya.

Ugandan oil is also being developed by China National Offshore Oil Corp.